Last year was a good one for MGIC Investment Corp., the nation's largest mortgage insurer.

For the fourth quarter, earnings per share came in at $1.19, a 20% increase from the year earlier period. Full-year earnings were $4.33 a share, up 24%.

Results for the quarter and year both beat Wall Street's expectations. The consensus estimates of analysts were $1.16 and $4.30.

New insurance written increased 8% in 1996, to $32.8 billion. The company's primary insurance in force was $131.4 billion as of Dec. 31.

Even though many economists are predicting that mortgage origination volume will not top 1996's total of just under $800 billion, president and chief executive officer William H. Lacy said 1997 also should be a good year for MGIC. He added that he does expect originations to top $700 billion for the year.

"MGIC is well positioned to capitalize on this market opportunity with our traditional insurance products and services, as well as with other products such as risk-sharing arrangements with customers," Mr. Lacy said.

Jonathan Gray, an analyst at Sanford C. Bernstein & Co., New York, said that one of the more significant developments in MGIC's fourth quarter was that its market share increased, even though the industry wrote less insurance in that quarter than it had in the third. He added that MGIC's market share had been declining somewhat in 1996 from 1995.

Mr. Gray estimated that the mortgage insurance industry wrote $28 billion in new insurance in the fourth quarter. Of that total, MGIC wrote $7.7 billion, giving it a share of 27.5% - about where it was in 1995. MGIC's market share for the third quarter was 23.3%, he said.

Milwaukee-based MGIC is the first of the publicly traded mortgage insurers to report its 1996 earnings. Next week CMAC Investment Corp, PMI Group, Amerin Corp., and Triad Guaranty Inc. are to report their earnings.

And since MGIC's quarterly market share gain comes in an industry that does not have many players to begin with, it will be interesting to see which publicly traded mortgage insurers, if any, report declines. There also are a few mortgage insurance companies that are not publicly traded.

Mortgage insurers provide coverage to lenders. When a borrower does not pay at least 20% down, the loan must be insured since Fannie Mae and Freddie Mac cannot purchase uninsured mortgages with a down payment of less than 20%.

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